Question : A sum becomes Rs. 7,436 in two years when interest is compounded annually at the rate of 4% per annum. What was the sum?
Option 1: Rs. 7,075
Option 2: Rs. 6,275
Option 3: Rs. 6,575
Option 4: Rs. 6,875

Question

Question : A sum becomes Rs. 7,436 in two years when interest is compounded annually at the rate of 4% per annum. What was the sum?

Option 1: Rs. 7,075

Option 2: Rs. 6,275

Option 3: Rs. 6,575

Option 4: Rs. 6,875

Team Careers360 · Accepted Answer

Correct Answer: Rs. 6,875

Solution : Total amount = Rs.7,436
Rate of interest = 4%
Time = 2 years
$ ext{Total Amount}= ext{Principal}×(1+\frac{ ext{Rate}}{100})^{ ext{Time}}$
⇒ $7436 = ext{Principal}×(1+\frac{4}{100})^2$
⇒ $7436 = ext{Principal}×(\frac{26}{25})^2$
⇒ $ ext{Principal} = \frac{7436×25×25}{26×2}$
$ herefore ext{Principal} = 6875$
Hence, the correct answer is Rs. 6,875.

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Question : A sum becomes Rs. 7,436 in two years when interest is compounded annually at the rate of 4% per annum. What was the sum?Option 1: Rs. 7,075Option 2: Rs. 6,275Option 3: Rs. 6,575Option 4: Rs. 6,875

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Question : A sum becomes Rs. 7,436 in two years when interest is compounded annually at the rate of 4% per annum. What was the sum?
Option 1: Rs. 7,075
Option 2: Rs. 6,275
Option 3: Rs. 6,575
Option 4: Rs. 6,875